Howard Schultz on Corporations

Support worthy causes in countries where our coffee is grown

As CEO, my primary responsibility is to the people of Starbucks: partners, customers, and shareholders.

To me, "corporate responsibility," the term President Clinton used for a conference of CEOs in May 1996, means that management must take good care
of the people who do the work and show concern for the communities where they live.

So what about "social responsibility," the term used by companies that give a percentage of their earnings to charity, or sell organic products, or try to save the rain
forest? We don't use that term to describe Starbucks' approach, though "contributing positively to our communities and our environment" has long been part of our mission.

Some shareholders think companies should not make any charitable contributions.
But I have a different view. To reflect the collective values of our partners, we believe Starbucks as a company should support worthy causes in both the communities where our stores are located and the countries where our coffee is grown.

Build a big business on small business values

If you asked people in a focus group, "Tell me what Big Business means," you'd almost certainly get a series of negative statements.

And what's small business? Ask the same focus group, and they may well give you a set of completely opposite reactions.
Small business means hard-working people struggling to earn a living. Small-business owners are often well-intentioned and care about their customers.

Finally, if you ask: "How many big businesses act like small ones?" most people would answer: "Not
very many." When we tell people that we're trying to build a big business on a foundation of small business values, many don't believe it. Either they assume we're incurable optimists or they begin looking for hidden agendas that would explain our
REAL intentions.

One of Starbucks' greatest challenges is to try to break the mindset that big can't be good. If we don't, we'll lose the very values that attracted people to us in the first place.

People worry that national chains homogenize neighborhoods

We channel our competitive energy against rivals far larger than ourselves, like the big packaged food companies, not against local mom-and-pop coffeehouses.

The criticisms leveled against us crystallize a deeper issue: the growing fear about the
homogenization of neighborhoods and towns. Most of the opposition we've encountered has been in close-knit urban areas or small towns, where people are highly protective of their distinctive character. They worry that national chains will displace
locally owned stores and that fast food restaurants will elbow out the corner diner. A few groups have even prevented us from opening a store, by passing some ordinance or claiming insufficient parking.

We've noticed that whenever several coffee
businesses locate near one another, customers flock there. In the end, all of us benefit. We want people to feel delighted and excited that we're in their neighborhood, not put upon. Our goal is to find communities that eagerly welcome us.